An FMV (Fair Market Value) lease is a lease that does not define a fixed purchase price at the end of the lease term. Instead, the vehicle may be purchased for the fair marketing value at the end of the term. Fair market value is defined as the price of a piece of equipment if the equipment was sold at an “arm’s length,” between a willing buyer and a willing seller under similar terms and conditions.
With an FMV lease, the vehicle or equipment is owned by Trans Lease, and mileage caps may apply. FMV leases are considered operating leases.
Benefits of FMV Leases for Commercial Vehicles
Fixed monthly payments
Flexible lease structure
Option to purchase equipment at end of term
No requirement to purchase, allowing lessees to upgrade assets
Tax advantages for lessee
Avoids taking on large debts
FMV leases are a popular option for those businesses that may need to upgrade their equipment or assets frequently, while still enjoying the benefits of ownership.
If you no longer need or want the equipment, you may return the equipment to Trans Lease, where we will sell the equipment to a third party. If the sale nets an excess of what you owed, you will be paid that amount. If the sale is for less than what was owed, you will pay Trans Lease the difference as an additional payment.
An FMV lease is an operating lease in which lessees pay fixed monthly payments for a set period of time. At the end of the agreement, the asset may be purchased at the fair market value (FMV). This type of lease is flexible and beneficial to lessees, as they aren’t subject to unpredictable fees and they may choose to upgrade their asset at the end of the lease term.
Fair market value is defined as the price that something would get in an open market under normal conditions. Fair market value is a hypothetical price.
FMV leases have many benefits, including fixed monthly payments that may help the lessee stay within budget. At the end of the lease, the lessee may still obtain the vehicle or equipment by paying the fair market value, as determined at the time of the lease ending. FMV leases can also be a great option for those who will want to upgrade or switch out their vehicle when the lease ends.
TRAC leases allow the lessee to determine an agreed upon residual value. These leases are a great option for those businesses who intend to purchase their vehicle or equipment at the end of the agreement. An FMV lease allows the lessee to purchase the vehicle or equipment for what is determined to be a fair market value. Thus, FMV leases may be better suited for those seeking low payments and may not intend to keep using the same vehicle or equipment.